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Access to gas creating divide in Northern Ontario

The divide in energy costs between Northern and Southern Ontario is a regional divide between communities that are and aren't located along the natural gas pipeline.

THUNDER BAY – Northern Ontarians are spending more on energy than any other region of the province but within the region lies a deep divide between communities who have natural gas and those who don’t. 

The Financial Accountability Office of Ontario issued a report on Tuesday that found Northern Ontario households spend the most on electricity and other fuels.

FAO chief financial analyst Peter Harrison refused to release specific data his office used in its study due to its small sample size but expressed confidence in the accuracy of its regional relativity.

“It’s probably for a variety of reasons,” Harrison said of Northern Ontario’s high home energy cost.

“Climate is one of them, the availability of different types of heating and cooling technology, particularly electric heating and oil in areas that don’t have access to natural gas.”

Municipalities across Northwestern Ontario whose citizens face increasing electricity costs have been looking into the prospect of bringing natural gas to their communities but the cost has proven prohibitive. 

Goldcorp served as a corporate catalyst to construct a gas pipeline into Red Lake in 2012. Without an industrial proponent, however, Sioux Lookout falls short of Ontario's "profitability index" to expand the line, even though Red Lake was three times further away from the existing pipeline.   

Even municipalities near the existing grid would face unjustifiable costs in paying for its expansion. 

A meeting between the municipality of Neebing and a natural gas company in 2015 concluded expanding the line from Boundary Road to Mink Mountain would cost $76.5 million.

At a cost of $191,000 for each of the 249 properties the project would serve, being connected to natural gas would cost each household more than the median value of a Neebing home.

Other towns are seeking alternative natural gas delivery options.

Building a pipeline from Red Rock down the hostile terrain of Lake Superior’s north shore to serve the 11,000 people who live in towns between Schreiber and Wawa would cost $250 million.

Those five municipalities will produce a feasibility study by November that will consider a Northeast Midstream proposal to liquefy natural gas in Red Rock and transport it to local gasifying stations by road or rail. 

Terrace Bay Mayor Jody Davis said the towns’ populations can’t support the project on their own.

“It is expensive. It would be very difficult to proceed with an LNG (Liquefied Natural Gas) proposal if we didn’t get some kind of assistance, loans or grants from the province to help us move forward with this.”

In October 2015, Northeast Midstream CEO Joshua Samuel urged the district's leaders to lobby the province to subsidize natural gas expansion. 

Common Voice Northwest Energy Task Force co-chairman Iain Angus approached the province with a solution this spring, arguing those subsidies should come from all Ontarians.

Speaking before an Ontario Energy Board proceeding on ways to expand the province’s natural gas network in April, common voice and the Northwestern Ontario Associated Chambers of Commerce suggested all energy consumers pay an additional two per cent on monthly bills.

"All future expansions should be paid for by all natural gas ratepayers across the province, much like electricity used to be paid for in terms of its expansion and how much of the natural gas distribution system was paid for in the first place," Angus said.

“I’m sure a lot of the consumers in Southern Ontario would not be happy about paying it but up here in the north, we recognize that if we are to reduce everybody’s cost of living, we have to work together to do that." 

The OEB panel will publish its decision in December.